Saturday, 19 December 2009

The first Scorpene hull being fabricated in 2007. Today, that hull is complete but the MoD is still negotiating with DCNS to bring down the prices of critical systems for the submarine.

Minister of State for Defence, Pallam Raju: “French government is shirking their responsibility”

by Ajai Shukla

Business Standard, 19th Dec 09

An air of resignation hangs over the East Yard, a giant workshop shed in Mumbai’s Mazagon Dock Limited (MDL), where six Scorpene submarines are to be fabricated for the Indian Navy. Two years ago, when Business Standard visited this facility, it hummed with activity as welders assembled the hull of the first Scorpene, which was to join the Indian Navy in 2012.

Since then rumours of delay, of as much as two years, have swirled around Project 75, under which the Scorpenes have been acquired. Now, Business Standard has learned that work on the first Scorpene submarine has ground to a halt, and it is unlikely to be ready before 2015. And, most disquietingly, that delay is due to a contracting blunder, stemming from the MoD’s propagation of a myth that significant parts of the submarine were being built from Indian components.

This led the MoD to create a special category called Mazagon Procured Materials, or MPM. Of the total project cost of Rs 18,798 crores, some Rs 2700 crores (Euro 400 million) were set aside for MDL to contract directly for submarine materials. But the impression created --- by giving MDL a budget for locally procuring materials and systems from multiple vendors --- was false. The bulk of the MPM budget, as the MoD knew, would go straight to a single vendor: French company, Armaris, with whom India signed the Scorpene contract. This would pay for critical submarine systems, including the engine, the generators and special submarine steels.

There was no question of competitive bidding for these items. Since they affected crucial aspects of the Scorpene’s performance, such as noise levels, they had to be bought from the original vendor, Armaris, for performance guarantees to be valid.

It is not clear why the MoD left these crucial Scorpene systems unpriced. What is clear is that French company DCNS, which took over Armaris in 2007, is now demanding close to Rs 4700 crores (Euro 700 million) for these items, almost twice what was budgeted.

Minister of State for Defence, Pallam Raju, has told Business Standard that DCNS is basing its higher demand on cost inflation since the contract was signed in October 2005. The MoD is asking the French government to intercede with DCNS, but Paris is unwilling to help.

Mr Raju says, “We expect the French government to play a role in ensuring that it (the MPM items) is not priced abnormally high. We understand their need to make a profit, but the price should not be abnormally high. But we feel that the French government is shirking their responsibility.”

The MoD has pleaded its case with a range of French officials, but in vain. Says Pallam Raju, “I visited Paris (in June 09) and I had a meeting with DCNS. They assured us that they will hold our hand, but we are not getting that comfort level. I projected [the case] to the French defence minister as well. [In November] we had a senior French MoD bureaucrat… come [to Delhi] and I reflected it to him as well.

The MoD blames DCNS’ takeover of Armaris for further complicating negotiations. But that does not answer why a contract that took nine years to finalise failed to fix prices for materials worth Rs 2700 crores.

Senior naval officers who are familiar with the negotiations point out, “The inclusion of so many crucial systems in the MPM package --- systems that everyone knew had to be bought from Armaris/DCNS --- was a grave contracting mistake. This was done to give the impression of greater indigenisation… since these would apparently be items that MDL was procuring. But this scheme has backfired badly.”

Naval planners are struggling to deal with a situation where the induction of Scorpene submarines remains far away. Only after the MoD and DCNS agree on a price will production begin in France of the engines, generators and other systems that are included in the MPM category. Technicians working on Project 75 estimate that, once a price is fixed and a contract signed, it will be 33-36 months before the items are delivered to MDL and fitted on the first Scorpene. Then will start the painstaking process of outfitting the rest of the vessel, fitting weapons and sensors and carrying out lengthy trials before handing over the submarine to the navy.

But work in the East Yard has not entirely stopped. Having completed the first hull, MDL is going ahead with fabricating the second and the third. Officials involved in Project 75 say this will allow submarines to be delivered at 9-month intervals, rather than the planned 12 months.

But until the MPM contract is signed, and the systems delivered, MDL’s East Yard will not be producing submarines, but 200-foot-long metal tubes for a project that began two decades ago, and has gradually become a symbol of ineffective defence planning.

The Indian Navy’s prestigious Project 28, the programme to build four of the world’s stealthiest anti-submarine corvettes, is on track to become even more cutting edge. By the end of this month, three international shipbuilders will be bidding to provide Kolkata-based Garden Reach Shipbuilders and Engineers (GRSE) with the technology to build a major part of the corvettes --- the entire superstructure --- with lightweight composites.

By making the superstructure, which is the upper part of the ship that rests on the hull, of lighter composite material, the 2500-tonne warships will become lighter, stealthier and far more stable in the water. Already acclaimed as world-class warships, composite superstructures will make them, considering their low weight, highly effective submarine hunters.

Business Standard has learned that the Ministry of Defence (MoD) will shortly issue tenders to three shipbuilders with extensive experience in fabricating composites. Kockums of Sweden, a subsidiary of ThyssenKrupp Marine Systems (TKMS), which builds the world’s stealthiest warships, the 650-tonne Visby class corvettes, is a leading contender; also in the fray are Italian shipbuilder, Intermarine; and Korea’s Kangnam Corporation.

With composite materials increasingly crucial to warships, this lucrative tender could open the door for broader partnership with Indian defence shipyards. The three companies are maintaining a discrete silence for now, but an aide to the spokesperson of TKMS admitted, “India is an interesting market for TKMS at the moment because of the serious attention that the Government of India is giving to the technical future of the Indian Navy.”

The first two corvettes of Project 28, which are nearing completion, have already been built with conventional steel superstructures. Subsequent corvettes, i.e. the third ship onwards, can have composite superstructures. The Chairman and Managing Director of GRSE, Rear Admiral KC Sekhar told Business Standard during a visit to GRSE in August that, “Composite materials technology can only be incorporated for the third and fourth ships of Project 28. The first corvette is already 90% completed. 80% of the superstructure is ready for the second corvette.”

All the high technology going into Project 28 is boosting costs; GRSE and the MoD are locked in negotiations to finalise a price for the corvettes. Since 2003, when the order was placed, GRSE has worked on Project 28 based on nothing more than a Letter of Intent from the MoD. The cost mentioned in that LoI was derived from the cost of the earlier Project 25A, for previous generation Kora class corvettes.

But now, that cost has ballooned, partly because of repeated changes that the navy has demanded in order to keep Project 28 at the cutting edge of stealth technology. The LoI’s Rs 2800 crore for the four ships of Project 28 (i.e. Rs 700 crores per corvette), has swelled to Rs 7000 crores (Rs 1750 crore per corvette). And, since the cost of the first ship of Project 28 was to determine the real cost of Project 28, the MoD has little option but to pay that amount.

But Business Standard has learned that the MoD-GRSE negotiations could soon have a happy ending. Although the order was placed in 2003, the MoD is likely to agree to a “commencement of production” date of March 2006, to compensate for the delays caused by repeated changes in specifications. Since the first Project 28 corvette is likely to roll out in 2012, that will amount to a notional build period of 6 years, in line with the time that most foreign shipyards take to produce the first ship of a class. Subsequent ships, however, are expected to be churned out much faster.

The Project 17 frigate, INS Sahyadri, being fitted out at the Mazagon Dock, Mumbai

by Ajai Shukla

Business Standard, 15th Dec 09

Strategic circles are abuzz with rumours that the United Kingdom will soon offer India one of the new-generation aircraft carriers that it is constructing, since they are turning out too expensive for the Royal Navy to afford. Interestingly, India will almost certainly turn down the offer.

The Royal Navy had planned to build two Carrier Vessels Future (CVFs): the 65,000 tonne HMS Queen Elizabeth and HMS Prince of Wales. With the budgeted price of US $6.4 billion (Rs 30,000 crores) for the pair now apparently the cost of each, building a third and selling it abroad is an option being considered to reduce the unit price. But, in contrast to this exorbitant price, the cost of India’s 44,000 tonne Indigenous Aircraft Carrier (IAC), under construction at Cochin Shipyard Limited (CSL), is barely a third of the Queen Elizabeth. And the Indian Navy’s next IAC, a 60,000 tonne behemoth like the Queen Elizabeth, will cost less than half its British counterpart.

In the gloomy framework of Indian defence production, warship building has emerged as a silver lining. The Kolkata class destroyers, being built at Mazagon Dock Ltd, Mumbai, will cost the navy Rs 3800 crores each, one-third the global price for comparative warships. The INS Shivalik, now completing sea trials, is a world-class frigate built at Indian prices. Earlier this year, addressing an industries body, the Indian Navy’s chief designer, Rear Admiral MK Badhwar, called for making India a global hub for building warships.

While his appeal might have been tinged with strategic motivation --- a larger warship industry would bring down unit prices, providing the navy with even more bang for the buck --- there is little doubt that shipbuilders would profit more from crafting warships than from slapping together merchant vessels. India has developed the capabilities, including, crucially, the design expertise, to produce world-class warships. But the defence shipyards do not have the capacity to meet even the Indian Navy’s needs; playing the international warship market needs clear-sighted government intervention to synergise the working of public and private shipbuilders.

Building a merchant ship is a relatively cheap and simple process, from design to outfitting. Essentially it involves welding together a hull (often from imported steel) and then installing imported systems such as engines, radars, the steering, navigation and communications systems, and some specialist systems, e.g. for cargo handling. Imported components form the bulk of the cost, with little value addition within the shipyard. A commercial shipyard’s business plan revolves around bulk manufacture, compensating for the small profit margins by churning out as many ships as possible.

Creating a warship is infinitely more complex, and expensive. The design process is critical, with complex software shaping the “stealthiest” possible ship, virtually undetectable to an enemy. Next, a host of sensors and weapons must be accommodated to deal with different threats: enemy ships, submarines, aircraft and incoming missiles. Harmonising their different frequencies, and canalising information and weapons control into a single command centre, involves weaving an elaborate electronic tapestry.

Actually building the warship is a labour-intensive task, which involves painstakingly duplicating key systems so that the vessel can sail and fight even with one side blown out by the enemy. More than 400 kilometres of wiring must be laid out inside, all of it marked and accessible to permit repair and maintenance. A modern frigate has 25 kilometres of pipelines, built from 10,000 separate pieces of piping.

All this generates many jobs. An army of skilled craftsmen, many more than in merchant shipbuilding, does most of this work manually, through an elaborate eco-system of 100-200 private firms feeding into each warship. And these numbers are growing as defence shipyards increasingly outsource, using their own employees only for core activities like hull fabrication; fitting propulsion equipment; and installing weapons systems and sensors.

In this manpower-intensive field, India enjoys obvious advantages over the European warship builders that rule the market. These advantages are far less pronounced in merchant shipbuilding, where Korean and Chinese shipyards are turbocharged by a combination of inexpensive labour, indirect subsidies, and unflinching government support.

What makes India a potential powerhouse in warship building is not so much its labour-cost advantage as a strong design capability that the navy has carefully nurtured since 1954, when the Directorate General of Naval Design first took shape. The importance of design capability has been amply illustrated in the bloated CVF programme. The UK, having wound up its naval design bureau, has already paid over a billion dollars to private companies to design the aircraft carrier. And with every minor redesign, not unusual while building a new warship, the design bill and the programme cost goes higher.

India has everything it takes to be a warship building superpower: the springboard of design expertise; cheap and skilled labour; and mounting experience in building successful warships. What it lacks is capacity, which the government can augment with the help of private shipyards. This will significantly augment private shipyard revenue, boost defence exports, and provide the government with another strategic tool for furthering its interests in the Indian Ocean region.

Saturday, 12 December 2009

The Kaveri on a test bed at GTRE, Bangalore, readying for its despatch to Russia for altitude and flight tests. The testing, near Moscow, is going well, say GTRE officials.

by Ajai Shukla

Business Standard, 12th Dec 09

In what was nominated in 1976 as the Fight of the Year, boxing legend, George Foreman, staggered to his feet after being twice knocked down by Ron Lyle, to flatten Lyle with a stunning knockout punch. If the Ministry of Defence has its way, India’s Kaveri engine, bitterly criticised as underpowered even after two decades of development, could recover to do a Foreman on its two world-class rivals.

Meant to power the indigenous Tejas Light Combat Aircraft (LCA), the Kaveri was heading for a quiet burial after completing flight tests that are underway in Russia. In its place, two alternatives were short-listed: the Eurojet EJ200, and the General Electric F-414 engines. A final choice was expected within weeks.

But, unexpectedly, the Kaveri has gotten off the floor. Business Standard has learned that the MoD --- apprehending that Eurojet and GE would hang back from providing India with critical engine technologies, even if Transfer of Technology (ToT) was mandated in a purchase contract --- now wants to co-develop an engine in India rather than manufacturing one under licence. The DRDO’s Gas Turbine and Research Establishment (GTRE), which has a design partnership with French engine-maker, Snecma, has been asked to design a more powerful Kaveri successor.

A Snecma-GTRE joint venture to develop the upgraded Kaveri is likely to be announced during President Nikolas Sarkozy’s visit to India in early 2010.

Minister of State for Defence, Dr Pallam Raju, has confirmed to Business Standard, “It is important for India to have indigenous capabilities in engine design. And having invested so many man-hours of work into the design of the Kaveri engine, it would be a national waste to fritter away or dilute those capabilities…. (Snecma) is willing to co-develop an engine with us; they are willing to go beyond just transfer of technology. It is a value-added offer that gives us better technology than what we would get from ToT from Eurojet or GE.”

Amongst the key engine technologies that India needs is that for Single Crystal Blades, which significantly enhance turbine performance within the incandescent confines of a jet engine combustion chamber. The MoD suspects that this technology, worth billions of dollars, will not be fully transferred by Eurojet or by GE.

An MoD official, who is closely involved in deciding between the EJ200 and the F-414, explains this apprehension: “The tender stipulates that 50% of the technology must be transferred to India. But the vendor will lump together a bunch of low-end technologies that might add up to 50%. What we want is one or two high-end technologies.”

GTRE designers say that it would take about 4 years to co-develop an engine with Snecma, somewhat longer than the 3-year time frame in which the EJ200 or F-414 would start being delivered. Based upon the performance of the Kaveri flight in the ongoing flight tests in Russia, GTRE sources are confident that, “Snecma-GTRE is fully capable of producing an engine as good as the F-414 and the EJ-200.”

That will involve improving from the current Kaveri’s maximum thrust of 65 Kilo Newtons (KN), to the 95 KN that the EJ200 and F-414 develop.

While Snecma remains tight-lipped, it is aware of the challenges in such a project. Business Standard has learned that Snecma had conducted a Technical Audit of the Kaveri programme in 1998, identifying design challenges that included developing materials that could withstand the combustion chamber temperatures of around 2000 degrees centigrade.

While the MoD is trusting Snecma to help GTRE in overcoming these challenges, it is also aware of the Kaveri’s unenviable record of time and cost overruns. The MoD is still considering whether to put all its eggs in the GTRE-Snecma basket or to go ahead on a parallel track, choosing either the EJ200, or the GE F-414, as insurance against further delays.

Friday, 11 December 2009

India’s nuclear power generation programme is now amongst the highest stakes markets in the world. With plans to generate 60,000 MWe (megawatt electrical) by 2030, up from just 4120 MWe today, India will need more than 50 nuclear reactors, allowing for a generating capacity of 1000 MWe each.

With each nuclear reactor costing US $4-5 billion to set up, capital costs alone add up to $200-250 billion. Then there are fuel costs, nuclear waste disposal, reprocessing, consultants and advisors and, of course, the financial market aspects of raising all that money.

For the Russian and French state-owned nuclear power industries, the Nuclear Suppliers Group (NSG) waiver that followed the US-India nuclear deal opened the doors to the Indian market. But America’s private corporations --- including GE-Hitachi and Westinghouse, the technology source for two-thirds of the world’s operating nuclear reactors --- are still held back by US laws.

And so, even as Russia and India signed an agreement last week, in Moscow, on Cooperation in Peaceful Uses of Atomic Energy; an American delegation of 50 top executives from that country’s leading nuclear suppliers began a six-day visit to India.

Three steps to business

Just three steps remain to be taken before they can commence business with India: a US-India agreement on reprocessing nuclear fuel; a Part 810 Assurance that India must provide for safeguarding technology; and an Indian liability law to cater for nuclear accidents.

The first of these, theReprocessing Agreement is not required by US law, but India insisted that both countries sign this agreement so that, even if Washington imposes sanctions, India’s fuel supplies remain assured. Both sides hoped to sign it during Prime Minister Manmohan Singh’s visit to the US last month; the final draft, however, is believed to be ready now. Washington has only signed reprocessing agreements with Japan and Euratom; both took years to negotiate.

The second step remains the Part 810 Assurance, which the US Department of Energy requires from foreign governments that wish to source nuclear materials or technologies through US companies. Licenses are issued to US suppliers only after the recipient government pledges to use the acquired technology exclusively for peaceful purposes and that it will not re-transfer it to another country without the consent of the US government.

The final step remains the enactment of a Nuclear Liabilities Bill, which has been passed by India’s union cabinet and will be introduced in parliament during the winter session. This domestic legislation is essential for India to join the Convention on Supplementary Compensation (CSC), a worldwide liability regime for paying enhanced compensation in the event of a nuclear accident or disaster. The CSC functions like an insurance mechanism, with member countries paying an annual amount based upon their nuclear power generation capacity. In the event of a major accident, the CSC assists in the payment of enhanced compensation from a global pool, which is maintained through annual contributions from member countries.

This legislation specifies that legal jurisdiction in the event of an accident will lie within India. The domestic liability bill forms the first tier of compensation, which is handled in country. Tier-2 compensation, in the event of a major accident, is paid through the CSC. While imposing a limit of approximately US $450 million on the compensation payable in an accident, this framework guarantees speedy disbursement of compensation.

"All three close to settlement"

Each of these three requirements, believes the US delegation, is close to settlement. Ted Jones of the US India Business Council (USIBC), which has brought this delegation to India, points out, “Though Washington and New Delhi signed the 123 Agreement a year ago, the process only began in July 09 because of elections in both countries. But since Hillary Clinton’s visit in July, we are already on the brink of resolving all three implementation issues.”

While Russian and French nuclear suppliers --- Rosatom and Areva respectively --- have begun early, the US delegation in New Delhi does not believe it is missing out in the Indian market. “We spoke yesterday to Mr R Chidambaram, the PM’s Scientific Advisor, and it is clear that there is space for everyone”, said one American executive. “India needs multiple sources, multiple partners and multiple technologies. India needs to do business with everyone to meet those needs.”

Saturday, 5 December 2009

Broadsword learns that the deal is likely to be closed at about US $1.8 billion. Thales is bringing down the price by involving Indian industry

by Ajai Shukla

Business Standard, 05 Nov 09

French President, Nikolas Sarkozy, has thrown his weight behind the the Rs 10,000 crore bid by French company, Thales, to upgrade the Indian Air Force Mirage-2000 fighter fleet. Sarkozy’s defence minister, Hervé Morin, in New Delhi for a day, made his pitch this morning to Defence Minister AK Antony, telling him that President Sarkozy is keen on signing the deal when he visits India early next year.

Addressing a press conference after his meetings in South Block, Mr Morin revealed that he discussed outstanding procurement cases, including the Mirage-2000 upgrade, with his Indian counterpart. Morin said, “We are hoping that some of the procurement cases that are under way between India and France are finalised by the time Sarkozy visits.”

Through two years of negotiations, French aerospace major, Thales, and the IAF have been unable to agree on a price for outfitting India’s 51 Mirage-2000s with new radars, avionics, electronic warfare systems and onboard computers, which will make the aircraft battle worthy for another 15 years. From an initial offer of Rs 13,500 crores (US $2.9 billion), Thales came down to Rs 10,000 crores (US $2.1 billion). But even that is exorbitant; the IAF has let it be known that, instead of spending Rs 196 crores (US $41 million) on each Mirage-2000, it would prefer to buy brand new fighters.

That hard bargaining, it seems, is working. Thales is looking to reduce its price by using Indian suppliers for a significant share of work and components for the upgrade. The IAF now believes that a deal could be close. A top IAF official, who is close to the negotiations, told Business Standard on condition of anonymity, “Thales is climbing down from its high horse and we will meet them halfway. The French president has given his officials a diktat that the Mirage-2000 upgrade deal must be buttoned up this year.”

That urgency is fully endorsed by French officials. One highly placed French industrial source asks rhetorically, “If the upgrade deal is not finalised, what else is there for Sarkozy to sign in Delhi?”

So far, during negotiations, Thales has argued that if India insisted on a cheaper upgrade for the Mirage-2000 fleet, it should be prepared to upgrade fewer systems. If, for example, the IAF was willing to upgrade only the weapons systems, the cost would be considerably cheaper. But the IAF insisted on a full upgrade.

Now, with Thales looking to source from India, there could be rich pickings for Indian avionics manufacturers like Samtel Thales Avionics, the joint venture that NCR-based Samtel Display Systems has set up with Thales. Components developed in France by Thales, will be manufactured cheaply in Samtel Thales Avionics’ high-tech facility near Ghaziabad, allowing Thales to lower its bid significantly.

Puneet Kaura, Executive Director, Samtel Display Systems, confirmed to Business Standard that, “Samtel Thales Avionics is going to be a major partner in the Mirage-2000 upgrade. We have negotiated with Thales for doing a number of work packages in the upgrade. This will also benefit Thales in meeting the offset liabilities that will arise out of this deal.”

For IAF planners the participation of Indian companies, including Samtel Thales Avionics, is a welcome prospect since they would be able to maintain and repair the upgraded avionics in India. The Indian companies would also handle “obsolescence management”, which involves redesigning avionics cards that need upgrading.

Thales was already on track to build avionics systems in Samtel Thales Avionics for a variety of Indian aircraft. These include the technologically advanced TopSight-I, the Helmet Mounted Sight Display (HMD) that Indian Navy MiG-29K pilots will use while operating from aircraft carriers.

Thursday, 3 December 2009

The United States Military Academy at West Point, where America trains cadets to officer its army, has long provided an emotive rostrum for sounding the trumpet to battle. John F Kennedy, chose West Point to brace America, in 1962, for the looming Vietnam conflict. In 2002, George Bush took the podium at West Point to publicly unveil his doctrine of “pre-emptive action”, which opened the doors to Iraq. Barrak Obama, too, decided to look into the eyes of the cadets he would commit to battle, when announcing today that the US would despatch 30,000 additional troops to defeat the Taliban in Afghanistan.

If George W Bush’s presidency is condemned to be associated with the Iraq War, Obama has ensured that his will be linked with Afghanistan. Since he was sworn in, Obama has tripled America’s military commitment to Afghanistan from 32,000 US soldiers in that country to 98,000 once this latest surge is implemented. This increase disregards growing opposition in America to remaining embroiled in Afghanistan. Afghanistan is now Obama’s war.

Obama’s political isolation is highlighted by his allies’ reluctance to bear a greater share of the military burden. The 19 coalition members who are fighting in Afghanistan have mustered --- after protracted US lobbying --- a mere 7,000 additional soldiers.

Given these risks, Obama spent the greater part of his 30-minute speech laying out a clear and inflexible exit strategy for eventually quitting Afghanistan. He declared that the troop surge would allow America to, “begin the transfer of our forces out of Afghanistan in July of 2011…. After 18 months, our troops will begin to come home. These [30,000 soldiers] are the resources that we need to seize the initiative, while building the Afghan capacity that can allow for a responsible transition of our forces out of Afghanistan.”

Obama’s commander in Afghanistan, General Stanley McChrystal, should be pleased with his commander-in-chief’s support. Exactly two months ago, McChrystal had submitted his plan for Afghanistan, asking for 40,000 troops to execute it. Obama has given him almost as much as he asked, and strongly endorsed General McChrystal’s strategy of training 400,000 Afghan soldiers and policemen, who would handle security after America headed home.

Obama’s plan could provide an equal satisfaction to the Taliban, who now know exactly when their enemy plans to leave. For years now, senior Taliban leaders have predicted that the west does not have the stomach for a long haul in Afghanistan. Their videotaped reactions have not yet reached Al Jazeera Television, but it is safe to predict an element of “I told you so”.

Obama implicitly acknowledged this danger, but emphatically rejected calls for “a nation-building project of up to a decade”. An open-ended commitment, said Obama, would incur heavy costs, while “the absence of a time frame for transition would deny us any sense of urgency in working with the Afghan government. It must be clear that Afghans will have to take responsibility for their security, and that America has no interest in fighting an endless war in Afghanistan.”

But Obama’s readiness to declare victory and leave sits uneasily with his reassurances to Pakistan. Praising Pakistan’s military offensive in Swat and South Waziristan, Obama proffered substantial military and aid flows provided Pakistan finished the job. Addressing Pakistan’s deep-rooted suspicion that --- like at the end of the anti-Soviet campaign in Afghanistan --- Washington would turn its back on Islamabad, Obama declared, “We will strengthen Pakistan’s capacity to target those groups that threaten our countries…. the Pakistan people must know America will remain a strong supporter of Pakistan’s security and prosperity long after the guns have fallen silent, so that the great potential of its people can be unleashed.”

For Afghanistan watchers, Obama’s West Point speech raises many questions. Can 140,000 troops pacify Afghanistan? US Army Chief, General Eric Shinseki, had estimated that half a million US soldiers would be needed to pacify Iraq, a significantly smaller country. Next, how will Afghan President Hamid Karzai, allegedly corrupt and a proven vote rigger, survive after US forces leave? And, finally, is Obama being too optimistic in saying that Pakistani public opinion had turned against extremism and that Islamabad was now genuinely on the side of America.

Tuesday, 1 December 2009

Washington gazers have argued about whether the Prime Minister’s visit to the US was a success or a failure. Symbolism more than substance was the eventual consensus, with solace being extracted from President Obama’s reference to India as a nuclear power.

The disappointment that tinged this conclusion stems from a tendency to measure the success of visits in terms of big bang agreements. Phrases like “common ideals”, “shared values”, and “vibrant linkages” that filled the Obama-Manmohan joint declaration are considered useful preambles; but observers want the real stuff as well. However, this time round, with a “Global strategic partnership”; a “New framework for the U.S.- India defence relationship”; and the “US-India civil nuclear agreement”, already delivered, there wasn’t much left to sign.

The improbable speed with which Washington has warmed to New Delhi has created unrealistic expectations. In 1971, President Nixon and Henry Kissinger were describing Indians as “bastards” and “aggressive goddam people”; and referring to Indira Gandhi as an “old witch” and a “bitch” in turn. That said as much about Nixon and Kissinger as about US-India relations but, still, it was only a decade ago that India faced full-frontal sanctions from Washington after the nuclear tests of 1998. In less than a decade that relationship has flowered, yielding a defence framework agreement in 2005 and the civil nuclear agreement last year.

While India has benefited from this new partnership --- in nuclear power generation, for example, or in access to US intelligence a la David Headley --- New Delhi has hardly had to walk the talk. It retains an independent foreign policy, even on US bête noir, Iran; and despite the allegations of the political left, India concedes little to the US in defence policy and procurements.

Compare this with America’s longstanding relationships with UK and Australia, whom Washington counts amongst its closest allies. When the US goes to war --- as in Iraq and Afghanistan --- London and Canberra go along too. America’s NATO allies face the same pressures. Japan, closely linked since World War II by a mutual security treaty, plays reluctant host to tens of thousands of US soldiers. Israel remains a longstanding partner, even if somewhat diminished under Obama. Over time, all these countries have generated political, bureaucratic and military goodwill in Washington. Even the so-called Major Non-NATO Allies (MNNA), such as Pakistan and South Korea, with institutional linkages built over decades, command greater leverage amongst Washington’s political and bureaucratic class than India does.

Only in romantic relationships is the initial period the steamiest. Relationships between countries warm up more gradually as legislative frameworks are negotiated as the foundations for strategic partnerships. In the US-India relationship only the initial steps have been taken in this process. The defence partnership is no more than a framework, valid for ten years, with a formal agreement still in the future. With New Delhi playing negotiating hardball, it will take years to negotiate the agreements that are needed for real partnership. The End User Monitoring agreement, a political minefield for any Indian government, has been finalised painstakingly. Another political hot potato, a Logistic Support Agreement (LSA) remains to be hammered out; so does a Communication and Information Security Memorandum of Agreement (CISMOA). A formal defence pact can materialise only upon this foundation.

Only after that, for all its political impetus, will the US-India relationship begin to give India what it most urgently needs from the US: high technology. So far, the message has not flowed down from the top floors to the functional levels of the US State Department, the Pentagon and the Department of Commerce, which issue the licences needed for exporting sensitive technologies.

This is especially so with the inwardly focused Obama administration, which does not view India from the balance of power perspective of the Bush-Rice regime. India remains a fellow-democracy, something greatly cherished in the American psyche; and a lucrative market, something that America loves even better. But New Delhi remains marginal to Washington’s immediate foreign policy challenges.

The absence of high profile agreements between Obama and Manmohan could actually benefit India, allowing New Delhi the diplomatic space to reassure longstanding allies like Russia. Mere assurances that “the US-India relationship will not be at the cost of other countries” have cut little ice in Moscow. India can ill afford to jeopardise the strategic technology and assistance flowing in from Russia. But Defence Ministry officials have faced growing annoyance; their interlocutors in Moscow complain pithily, “We give you assistance that America will never consider. But, at the first opportunity, you jump into their laps.”

India remains free to pursue partnerships in its legitimate interest. But those must be harmonised with existing relationships and New Delhi has not yet expended the time and political and diplomatic effort needed for this. Realistically, therefore, the modest outcome of Dr Manmohan Singh’s visit to Washington was not just predictable but has spared New Delhi some embarrassment in its relationship with other allies.